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DE Annual Report & Franchise Tax – Deadline

In today’s blog we will answer some questions about the deadline for filing your Delaware Annual Report & Franchise Tax

The Delaware annual report for all domestic corporations is due on or before March 1.

What happens if I miss the deadline for filing my corporation’s Delaware annual report and paying the franchise tax?

A penalty fee of $200 will be added if the annual report is not filed by the due date. In addition, 1.5% interest is assessed and added to the total amount due. The 1.5% interest is calculated based only on the total franchise tax due and penalty, does not include the annual report fee. Interest is continually accrued on the 6th of each month until the franchise tax is paid or the entity goes into an inactive status.

What if I have not filed Delaware annual reports for two consecutive years?

The State will declare the company void.  The company will not be in good standing and will need to pay all applicable fees.  A reinstatement will need to be filed in order to bring it back into good standing.  If Incserv is the registered agent, a resignation will most likely be filed prior to March 1, which will place the company into a forfeited status.  Again, all applicable fees and the pertinent filing will need to be completed in order to reinstate to good standing.

What do I do if I made a mistake on my Delaware annual report filing?

An amendment may be filed, but it must be filed before a subsequent report is filed. For example, if you made a mistake on the 2018 report, the 2018 report must be amended before the 2019 report is filed. Otherwise the 2018 record will stand as is.  A $50 fee will need to be paid for any amended annual report filed.

If you have any questions about or need assistance with filing a Delaware annual report or paying Delaware franchise tax, feel free to reach out to us. We’re here to help!

Rose Redman, Assistant Vice President Operations

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Jurisdictional Closures for March 2020

Please see the list below for Jurisdictional Closures for March. Dates and information are subject to change.

Date
Holiday State
Mar 3rd Town Meeting Day VT
Mar 26th Prince Jonah Kuhio Kalanianaole Day HI
Mar 30th Seward’s Day AK 
Mar 31st Cesar Chavez Day (observed)
CA

Please check out our blog posts throughout the month for any last minute changes or updates from these or any other state or local office.

If you have any questions or need assistance, feel free to contact us at 800-346-4646 or via email at info@incserv.com.

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New DBA Auto-Filing Service available now!

If your company does business under another name rather than their registered name, you likely have a DBA (also known as a Doing Business As, Trade Name, or Fictitious Business Name) filed with either the State or the County where you are registered.  Some of these names are one and done – you file it once and it exists in perpetuity.  Others have an expiration date.  But what happens if the registration expires before a renewal is filed?  It is entirely possible that the company may lose the rights to that name if someone else files a DBA with the State using it for their own company.  If you operate under that name, that could cause a huge headache and financial burden because legally, you are no longer able to use that DBA – meaning anywhere you used your DBA like your website, your logo, or your marketing materials, to name a few things – may have to be changed.  Obviously, keeping your DBA can be a huge deal.

You already knew you had a yearly obligation to us to pay your registered agent invoice.  You likely knew you have an obligation to every state you are registered in to file an annual report (in most cases) and pay a filing fee or make a franchise tax payment every year.  You knew about your federal tax obligations.  And now you have something else you have to worry about?  And where do you file – state or county?  How much is it?  And how often?

Great news – Incserv has a new, much-anticipated service called DBA renewal auto-file service.  We take care of managing everything for you and ensure that you don’t lose your DBA name.  We have all the details – the fees, the filing location, the expiration date, and the renewal period.  If something changes, like the fee or the renewal period, we’re on top of it.  We make sure the filing gets done so you can keep your name and check this item off your list without you having to worry about it.

Interested?  Let us know which DBAs you’d like for us to handle.

But what about if you want to take care of this yourself?  You’re welcome to do so, of course.  Incserv stores the expiration date and the renewal period for each DBA in Snapshot, our online client portal.  You can easily login and check the portal to see what DBAs are expiring soon.  Just want to check which ones you have filed?  This information is stored in Snapshot too!  Check the Entities table (use the “DBA” option at the top), or select the company that has a DBA then navigate to the DBA tab to see what DBAs have been filed for that entity.  Is one missing?  Let us know and we can get it added!

Please note all elected DBAs stored in our system have an annual nominal fee for housing and SOP purposes.

Interested in learning more about DBAs?  Shoot us an email; we’ll be happy to help!

Sara Flanagan, Systems Analyst

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DE Annual Report & Franchise Tax – Frequently Asked Questions

In today’s blog we would like to offer you answers to frequently asked questions when filing your Delaware Annual Report.

Q.  Where do I find my Gross Assets?

A.  The Delaware Annual Report requires your company’s entire Gross Assets as reported to the IRS on your Federal 1120, Schedule L form. If you haven’t filed your Federal Taxes yet, please refer to your balance sheet for your most recent information on your Gross Assets.  If you have an accountant or tax service handle this for you, please ask them for the most up to date information.  If you used Snapshot™ last year to file your report and nothing has changed, this information will still be available for your reference.

Q. What if my Gross Assets change after I file my Delaware Annual Report; shouldn’t I wait to file when it is finalized?

A.  You can file an amended Annual Report with the State of Delaware for a fee of $50 if you need to make a change, rather than filing your report late to wait for the finalized amounts. Filing late incurs both a penalty of $200 as well as interest of 1.5% per month on the unpaid tax amount.

Q. Where do I find my Issued Shares?

A.  The State of Delaware has record of your Authorized Shares and Par Value, however, Issued Shares are not public information. The shares your company has issued should be recorded on a company held stock ledger found in your corporate minute book.  If you have a CPA or Attorney handle these matters for you, please ask them for the current amounts.  If you’ve used Snapshot™ last year to file your report and nothing has changed, this information will still be available for your reference.

Q. My company didn’t do any business during part of 2019; can I enter those inactive dates in the space provided?

A.  The inactive dates on the report refer only to a portion of the year in which a company was potentially inactive within the records of the Secretary of State. If you had to file a renewal or reinstatement during the calendar year of 2019 then this may apply to your company (please call or email us to provide you with the dates.)  Otherwise this does not likely apply to your company.  If your company is no longer doing business, but you have not filed a dissolution with Delaware, your company will continue to be required to file a Delaware Annual Report until this is filed; please call or email us if you feel you need to dissolve.

Q. My company never began doing business; do I still owe this report and fee?

A.  As long as the company is Active with the State of Delaware, it will owe a Delaware Annual Report and franchise tax each year. The report fees are based on the Authorized Shares as outlined in the charter documents filed with Delaware.  If the company is minimum stock, then the minimum tax will be due ($225 which includes the report filing fee.)   If you feel you should dissolve the company because it will not do business in the future, please contact us to ask about dissolving.

Q. My Principal Place of Business is outside the U.S.; how do I enter this?

A.  There is a check box on the Annual Report for a “Non-US Address”. By checking this box and choosing the country, the report will format correctly to accept the address and allow the report to submit properly.

Q. Why am I receiving an error when attempting to submit my report through Snapshot™?

A.  Be sure and enable your pop-up blocker for our site when filing. If you still experience trouble, please let us know.

If you have any questions feel free to reach out. We’re here to help!

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What is a Clean Hands Certificate?

A Clean Hands Certification form is required to be submitted with any application for a license or permit in the District of Columbia, including a Basic Business License.

A clean hands certification is used in the business license application and requires the entity and/or its owners to attest to the fact that they do not owe the District more than $100.   A new process was started which requires issuing an actual certificate to go with the business license application.   These are issued by the Office of Tax & Revenue (OTR).  A business MUST have filed the FR 500 Combined Registration Application and received a “Notice of Tax Registration” before the OTR will issue the Clean Hands Certificate.  This certificate does not attest to tax returns  filed, etc. (different from a  good standing) and usually is used just as supporting documentation.

If an applicant for a license or permit has failed to file District tax returns, they are also subject to the Clean Hands Law (DC Official Code §§47-2861 through 47-2866)and will be denied the license or permit. The Office of Tax and Revenue (OTR) Collection Division receives Clean Hands certifications from various District agencies.

What is owed to the Department of Consumer & Regulatory Affairs, (DCRA), the District’s equivalent to the Secretary of State, is totally separate.  DCRA governs the business entities and have a two-year report filing requirement.  Good Standing certificates, as it relates to the standing of the entity and fulfillment of the requirements of maintaining a business in DC, are issued by DCRA.  If they are not in good standing with DCRA, their authority to do business may be revoked.

For assistance with this or any other request, please contact our Washington, DC office at 202-386-7575 or dcorders@incserv.com.

Nothing herein is intended to constitute legal advice on any subject or to create an attorney-client relationship. The materials presented here are in summary form. To be certain of their applicability and use for specific situations, we recommend an attorney be consulted.

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